Crime and Criminal Justice Research Findings No. 40Counting the cost:
Crime against business in Scotland
The motor/fuel and retail sub-sectors
John Burrows (MHB) and Dave Ingram (System Three Social Research)
While the Scottish Crime Survey routinely collects data about crimes against individuals and their households, there has never been any equivalent investigation of the impact of crime on Scotland's businesses. In November 1999, the Scottish Executive, in partnership with the Scottish Business Crime Centre, presented the findings of the first research enquiry into the extent, nature and costs of crime as it affects businesses in Scotland. The research was carried out to help develop the Business Crime Reduction Strategy for Scotland, the objective of which is "to reduce crime in Scotland to create a safe and secure trading environment in which businesses flourish". This summary forms part of a series of detailed analyses of sub-sectors found to experience the highest incidence of crime.
- across the 15 business sub-sectors surveyed in the course of the Scottish Survey of Business Crime, motor/fuel retailers experienced the third highest incidence rate, derived by calculating the total number of reported crimes across the targets at risk. General retailers had the sixth highest incidence rate.
- about six in ten motor/fuel and general retail businesses experienced crime during 1998.
- motor/fuel businesses which had experienced crime suffered, on average, 11 incidents in that time, many of them acts of violence, and retailers suffered 9.
- crime is heavily targeted at a relatively small proportion of businesses: one in ten premises accounts for 64% of the total crime count amongst motor/fuel retailers and for general retailers this figure rises to 71%.
- the prevalence of crime - that is, the number of business premises affected - across these two sub-sectors is only slightly higher than for all the businesses surveyed, but the high numbers of crime experienced by victims serves to increase incidence rates.
- about two-thirds of all cases of repeat victimisation against motor/fuel retailers (64%) and half of those against general retailers (52%) occur within eight weeks of the preceding incident.
The Scottish Survey of Business Crime (SBC) research examined the experience of crime across five principal business sectors:
- wholesale and retail
- hotels and restaurants
- transport and telecommunications
These five business sectors account for some £24 billion turnover, at factor cost, or just under half (46%) of GDP in Scotland. In aggregate, they account for some 65,000 VAT-registered firms within Scotland and employ a workforce of about one million.
One of the principal findings of the overall survey was that, while there are differences in crime rates (in terms of crime prevalence and incidence) between sectors, analysis at the level of business sub-sector seemed to present a more precise indication of crime risk in terms of 'labels' that are more widely understood. For example, in the 'transport and telecommunications' sector, the incidence of crime against the 'public transport' sub-sector is more than eight times that experienced by businesses in the 'water and air transport' sub-sector.
The incidence of crime - that is the total number of crimes spread across all the targets at risk - is presented in Figure 1. This indicates that, across the 15 sub-sectors (or Standard Industrial Classification divisions) motor/fuel retailers experienced the third highest incidence and general retailers had the sixth highest incidence rate.
The wholesale/retail sector comprises the motor/fuel, wholesale and retail sub-sectors. In Scotland, this sector employs some 312,000 staff and has an annual turnover of roughly £10 billion. The motor/fuel sub-sector accounts for approximately 3,300 business premises in Scotland and retail 13,000.
Figure 1 - Incidence of crime
Crime risks for motor/fuel and general retail businesses
One priority of the research was to consider in particular how many businesses experience crime at all (that is, crime prevalence), and how many crime incidents are experienced across all the business targets 'at risk' (that is, crime incidence). It concluded:
- 61% of the motor/fuel, and 60% of the general retail, businesses under review experienced crime during 1998. Both figures are marginally higher than the prevalence rate for all the businesses surveyed (58%).
- nearly six in ten (59% for both sub-sectors) had experienced some form of property crime. For motor/fuel retailers, vandalism, frauds and break-ins proved the most common property crimes. For general retail businesses, thefts by outsiders, which includes 'shoplifting', were the most common occurrences, followed by vandalism and break-ins.
- about one in seven had experienced violent crime (14% and 12%, respectively). Motor and fuel retailers experience over twice the rate of actual and attempted robberies, although these remain rare events.
- substantial numbers of those businesses that fall victim to crime do so on more than one occasion: 49% of motor and fuel retailers and 41% of general retailers experienced more than one offence in 1998.
Figure 2 presents the proportion of non-victims and premises victimised on one, two or three and four or more occasions for businesses in the sub-sectors under review, as well as for their parent sector (wholesale/retail) and for all the businesses surveyed.
Figure 2 - Prevalence of all crime
- those motor/fuel businesses which had experienced crime suffered, on average, 11 incidents and general retailers 9, the average for all the businesses surveyed.
- the types of crime most likely to be repeated against motor/fuel retailers were threats of violence, vandalism and thefts by outsiders and for general retailers they were employee thefts, thefts by outsiders and frauds.
- crime is heavily concentrated in its impact: one in ten premises accounts for nearly two-thirds of the total crime count (64%) amongst motor/fuel retailers and as much as 71% of the total crime count amongst general retailers.
- in terms of the overall incidence of crime against motor/fuel retailers, the most common incidents are acts of vandalism (against equipment/stock, company vehicles and buildings) and threats of violence (Figure 3).
Figure 3 - Distribution of crime: motor/fue
- by comparison with other businesses, the pattern of crime in this sub-sector is marked by the high levels of vandalism, robberies, threats of violence and break-ins (Figure 4).
Figure 4 - Types of crime to which motor/fuel retailers are highly vulnerable
- it can be estimated that the 3,300 businesses in the motor/fuel sub-sector experienced some 22,370 incidents in 1998.
- in terms of the overall incidence of crime against general retailers, the most common incidents are thefts by 'outsiders' (mainly 'shoplifting', of course) and frauds (Figure 5).
Figure 5 - Distribution of crime: general retailers
- by comparison with other businesses, the pattern of crime in this sub-sector is marked by the high levels of thefts by outsiders and frauds. Incidents like breaks-ins, vandalism, or thefts of/from vehicles are comparatively rare (Figure 6).
Figure 6 - Types of crime to which general retailers are highly vulnerable
- it can be estimated that the 13,000 businesses in the retail sub-sector experienced some 72,300 incidents in 1998.
Patterns of repeat victimisation
The full report of the SBC indicated that, where victims could recall the time at which second or later offences of the same type occurred, most seemed to be repeated within short period of time. Questions about the 'time lapse' between repeats were asked in respect of break-ins, vandalism and vehicle thefts. Overall, 55% of these incidents occurred within eight weeks of the preceding incident (when victims were able to recall the times). Moreover, a substantial minority (40%) believed the incidents were connected.
For motor/fuel retailers:
- 64% of repeats, a higher proportion, occurred within eight weeks .
- some 42% of businesses believed the repeat incidents they experienced were connected to one another.
For general retailers:
- 52% of repeats, a slightly lower proportion, occurred within eight weeks.
- some 44% of businesses believed the repeat incidents they experienced were connected to one another.
Figure 7 - Time lapse between incidents
Other factors, beyond the type of business conducted, associated with crime risk
The results of the main survey, together with the lessons drawn from site visits and interviews with selected businesses, led to the findings that crime risks are affected by a variety of factors.
There are first those factors on which the survey was able to gather reliable data: these include the region in which businesses operate; the immediate surroundings in which businesses operate; the type of goods stored and manufactured and the hours worked by staff. It appears that some of these factors serve to increase risk in the motor/fuel sub-sector, for example:
- staff operating these businesses tend to work long hours.
- By the same token, the following factors seem to increase crime risks in general retail businesses:
- many are located in city centres;
- a proportion of retail businesses store goods or products, like drugs, cigarettes, alcohol or high value electrical items, that increase their vulnerability.
There is also a range of highly localised factors that can be significant in determining a business's vulnerability to crime. The survey was unable to gather data on these influences, although it was able to indicate that they can sometimes be crucial in affecting vulnerability.
Businesses like motor/fuel and general retailers are highly dependent on customer contact. For such businesses, vulnerability often seems to be linked to location, particularly the 'type of customer' the location attracts.
The examination of these localised risk factors lends weight to the significance of considering 'opportunity' in the commission of crime, and in the value to be gained from adopting 'opportunity reduction' techniques.
The costs borne by motor/fuel and general retail businesses as a result of crime
The costs of crime borne by businesses can arise in various forms, and be measured in different ways. One of the observations made in the main report of the SBC was that the different forms of crime to which business premises fall victim inflict widely different costs. Across the board, thefts of vehicles (at an average of £5,325 per incident), followed by frauds (at £5,142), incur the highest cost per incident. Thefts by 'outsiders' inflict the lowest.
For motor and fuel retailers:
- thefts of vehicles are the most expensive incidents, costing an average of £6,633, with breaks-ins coming second (at £6,131) and then vandalism (at an average £3,316).
For general retailers:
- again, thefts of vehicles proved to be the most expensive occurrences (costing on average £6,633) followed by break-ins (£2,474) and employee thefts (£1,113).
- The full survey also reported that the average annual cost of 'witnessed' crime borne by the typical business surveyed (that is, both victims and non-victims) was some £2,300.
For motor/fuel retailers:
- this figure is substantially higher (at £2,834) largely attributable to the costs inflicted by break-ins and vandalism. Figure 8 provides a full breakdown.
Figure 8 - Average cost of crime (victims and non-victims): motor/fuel retailers
For general retailers :
- the figure is about one third of the average (at £867). Break-ins are the largest single contributor. Figure 9 provides a full breakdown.
Figure 9 - Average cost of crime (victims and non-victims): general retailers
What motor/fuel and general retail businesses currently do to prevent crime and the scope for partnership working
- just over a half of the crime incidents experienced by business in these two sub-sectors came to the notice of the police (56% for motor/fuel and 54% general retailers). This almost exactly mirrors the practice across all the businesses surveyed. The police are much more likely to be advised of incidents like break-ins, but only just over a third of all incidents involving violence come to their attention.
- like all Scottish businesses, those in the motor/fuel and general retail sub sectors invest widely in different types of security devices. The devices most often installed are intruder alarms, security lighting and different forms of special protection to doors and windows.
Figure 10 - Security devices in place: motor/fuel and general retail sub sectors
- business premises, particularly those in the sub-sectors most at risk, are well used to taking a variety of precautions to reduce crime risks. The precautions which are more commonplace amongst motor/fuel and general retailers are that they tend to limit the cash they hold in tills (done by 83% and 82%, respectively, compared to 74% of all businesses) and 'watch out for specific types of people' (done by 71% and 66%, respectively, compared to 62% of all businesses).
- a small proportion change their business practices to reduce risk: about one in ten have changed, or are considering changing, their business hours because of crime.
- about one in ten business premises in these two sub-sectors rate business break-ins as 'serious' in their area (7% for motor/fuel and 10% for general retailers). Despite the high incidence rates experienced, this broadly mirrors the views of all the businesses surveyed, and the implication was drawn that business premises in Scotland do not regard crime as seriously as many of their counterparts elsewhere in the UK.
- some 20% of motor/fuel retailers do, however, believe that 'crime in the area affects their ability to operate profitably', which is substantially higher than the 11% of general retailers (the average for all businesses) who hold this view.
- about one-third of these business premises (34% and 36% respectively) have experience of working in partnership with other organisations to prevent crime. This mirrors the experiences of all the businesses surveyed, where exactly one-third reported working in partnership with others.
- nearly two-thirds (59 involved in such schemes in the future. This is similar to the figure for all the businesses surveyed (61%).
The Scottish Survey of Business Crime was primarily based on a computer-assisted telephone interviewing (CATI) survey of 2,500 Scottish businesses. As a means of ensuring that these businesses would virtually all operate from business (as opposed to domestic) premises, the sample only included businesses with three or more staff. The sample was drawn from Dun and Bradstreet's business database. Estimates of the number of premises within each business sub-sector are based on the information held by Dun and Bradstreet and it is likely that these under-estimate the true figures.
Further methodological details are available in the full report on the results from the 1999 SBC, Counting the cost: Crime against business in Scotland, which may be purchased (price £10.00 per copy).
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